Today's Paper News Sports Features Business Opinion LEARNS Guide Newsletters Obits Games Archive Notices Core Values

North Little Rock council backs lodging-tax increase opposed by hoteliers

by Jake Sandlin | October 24, 2017 at 4:30 a.m.

To no avail, North Little Rock hotel owners opposing a 1 percentage point increase in the city's lodging tax showed up in force to the City Council chambers Monday.

City Council members voted 5-1, with one absent and one abstaining, to implement the new tax, effective Jan. 1, for hotel and motel rooms, bed-and-breakfast businesses, campgrounds and three RV parks in North Little Rock. Council member Linda Robinson voted against the tax. Charlie Hight abstained, and Maurice Taylor was absent.

The increase will raise the city's lodging tax to 4 percent. When added to other state, Pulaski County and city taxes, the total tax for a hotel guest, for example, will be 15.5 percent. The total rate in neighboring Little Rock is 15 percent.

Four people associated with city hotels spoke in opposition to the tax increase, and each asked for any vote to be delayed. About 25 others were present, representing about 90 percent of the city's hotel owners, according to Tom Roy, chief financial officer of the Wyndham Riverfront hotel in the city's downtown.

"We were hoping for the delay," said Manoj Patel, owner of the Hampton Inn-McCain hotel and chairman of the city's Advertising and Promotion Commission, which collects the tax. "There was no consideration [of the turnout]."

No approval is required of city voters for the tax increase, but the public has 30 days to petition for a referendum on the tax.

"The hardest thing we have to do is to vote against our mutual friends who are on different sides," Mayor Joe Smith said after the people opposing the increase finished commenting. "I think that's what we're prepared to do tonight."

Frank Fletcher, owner of the Wyndham Riverfront hotel, told the council that the tax would hurt the city's hotel business, with large groups opting to stay in Little Rock hotels instead. He acknowledged that individuals, including himself, don't choose a hotel based on the tax rate charged, "but companies do."

Fletcher said he had supported the initiative to raise the city sales tax from 1 percent to 2 percent in the summer but didn't know there would be two tax increases affecting hotels that will both take effect Jan. 1. City voters approved the sales tax increase in an Aug. 8 special election.

"I still like the mayor and the administration," Fletcher said after the vote. "I am disappointed that they don't think our business is going to suffer."

Robinson, who represents Ward 2, said she had been contacted by workers from "eight to 10" hotels in her ward who believe "this will hurt them."

"This is hard for me," she said. "I don't want to hurt any business."

Council member Debi Ross suggested that a 2 percent discount offered to hotels for submitting their tax collections before the monthly due date be raised to 4 percent to help offset the tax increase. It would take the council amending current tax collection legislation to make that change.

Smith said he would consider the suggestion but "would like to see the numbers." If it could be done, he said, he would want it effective at the same time as the new tax.

Both Fletcher and Roy asked for more information about how the tax would fund a planned building downtown where the city's Convention and Visitors Bureau would relocate, splitting one-third of the estimated $4.8 million cost with two other tenants. The Advertising and Promotion Commission oversees the bureau.

The building would be near a planned $4 million plaza that Smith has promoted as a visitor attraction and a site the city will rent out for numerous private events. The building isn't to be completed until April or May in 2019, Danny Bradley, the mayor's chief of staff, said during a meeting of a Downtown Development Board immediately before the council meeting. The city has $2 million available for the plaza, Smith said last week.

"This building won't be built at least for a year or maybe two," Roy said to the council. "This should be something we have plenty of time to talk about."

Fletcher said many believe that the bureau's home and the plaza "are connected" and wanted to know where the remainder of the plaza money would come from and how much its future operation would cost. Smith said last week that he expects to know the source of remaining $2 million "probably in the next month."

Fletcher said after the vote that hotel owners are "going to follow this through."

"We got no answer tonight," he said. "We're going to watch this to the very end. We still will try to get answers about the cost for the creation of the plaza and for its operation."

Metro on 10/24/2017

Print Headline: NLR council backs lodging-tax increase opposed by hoteliers


Sponsor Content